DON’T WAIT TILL JANUARY:
AT THIS time of year, many of us throw caution to the wind so we can ensure our loved ones have a good time over Christmas.
After all, there are the pre-Christmas sales, the bumper food bills, travel costs, kids wish lists and holidays to pay for. Credit cards take a hit, as do catalogues, store cards, overdrafts and other types of borrowing.
Around this time people start to get a sneaking feeling of dread that they’ve over extended themselves – and that a nasty dose of reality awaits in January.
But what happens if you’re in financial difficulties? The Government recently announced that it was consulting on introducing a ‘breathing space’ period of six weeks to help people get back on top of their finances. Personally, I don’t think that’s enough – and I don’t see why people in difficulties should have to wait for the consultation. So, here are a few tips if you’re struggling now.
ONLINE SHOPPING TRAPS:
Virtually all of the big lenders offer online credit. This looks seductive, especially with interest free periods, different ways to pay to reduce interest and other deals – but they’re all designed to part you with your cash.
Unless you’re disciplined – really disciplined – don’t take out the credit. These forms of lending work just like traditional catalogues. You don’t get clear warnings when the interest free period ends and payment dates vary considerably month to month. ■ Resolver can help you sort out complaints about pretty much anything for free. Check out resolver.co.uk and share your experiences at yourstories@resolvergroup. com
Many of us dread the cost of Christmas
Grit your teeth and check out the bank or credit statements now. Interest rates can be high, so the sooner you get help the more you’ll save. Less anxiety too!
Despite there being no ‘official’ breathing space just yet, banks and lenders are obliged by the regulations to come up with solutions to help you if you are going further in to the red.
They can suspend interest, remove charges, offer interestfree loans and more. So ask them what they can do to help. If they refuse, the ombudsman can look at your case.
If you’ve got lots of high interest loans and cards, it might make sense to
SPEAK TO THE LENDER: CONSOLIDATE.
combine them all in to one. This should be much cheaper than the rates you’re currently paying, but factor in things like transfer fees (if you move to an interest free credit card) or total interest (if you take out a loan).
If you’re using a catalogue or online retailer, note down in your diary when any interest-free or low interest periods end. These methods of payment are super expensive when the real interest kicks in. So beat the system by paying them off before this happens!
Make a list of all outstanding regular payments. Things like rent and mortgage payments take priority. With utilities like energy and water, check with your providers to see if you’re on the cheapest tariff – and with energy switch providers to reduce your bills. With non-essential contracts like broadband and mobile (yes, they are non-essential!) find out if your contract has ended – you might be overpaying.
DO THE DIARY: PRIORITISE: